SpaceX lowers IPO valuation target to $1.8 trln, Bloomberg reports By Investing.com

SpaceX is targeting at least a $1.8 trillion valuation in its upcoming IPO and could raise as much as $75 billion, with investor roadshows potentially starting June 4 and pricing by June 11. Bloomberg said the valuation target was revised down from earlier ambitions above $2 trillion, but it would still set up the largest IPO in history if completed at that level. The company also reported 2025 revenue of $18.7 billion, up from $14 billion a year earlier, though it posted a $4.94 billion net loss versus a $791 million profit in 2024 amid heavier AI and infrastructure spending.

Analysis

A mega-primary like this is less about the issuer and more about the re-pricing of private-market liquidity. A lower-than-initial target valuation still can clear if investors treat the deal as a scarce gateway into AI infrastructure; that would validate a broader reset in late-stage private marks where 2026 exit expectations are anchored to public comparables rather than prior venture rounds. The immediate second-order effect is on adjacent private AI hardware, launch, and infrastructure names: a successful bookbuild pulls forward demand for “picks and shovels” exposure, while a weak one pressures the entire complex by forcing mark-downs in the most crowded growth factor.

The biggest risk is not deal failure, but an overly enthusiastic first-day tape that masks deteriorating fundamentals. If the company is spending heavily into AI and infrastructure while the IPO market rewards revenue scale over margin quality, investors may extrapolate an unsustainable rule set to other pre-profit assets. That tends to last days to weeks, not quarters; once post-listing supply and lockup overhang enter the market, multiples usually compress fastest in the highest-duration names.

For public comps, the signal is mixed: premium on scarcity and AI optionality can help sentiment around listed high-beta beneficiaries, but it can also starve them of capital if allocators rotate into the marquee listing. The contrarian read is that a slightly cheaper valuation is actually constructive: it increases the odds of a clean print and reduces the chance of a blow-off top that later becomes a sector-wide confidence shock. The key tell is whether demand comes from long-only fundamentals or from crossover momentum — the latter would be a warning sign for a sharp post-pricing reversal.

Key Decisions for Investors

• Long-term: add a tactical long in APP on any IPO-related sympathy weakness over the next 1-2 weeks; risk/reward is attractive if market enthusiasm spills into AI optionality, but size small given factor crowding.
• Long/short pair: long SMCI vs short a basket of unprofitable private-AI proxies for 2-6 weeks; if the IPO clears well, listed hardware beneficiaries should retain liquid-comps premium while weaker names face valuation compression.
• Wait for pricing: avoid chasing the headline around the roadshow; if the deal prices at or above the revised range and the aftermarket opens >10% above issue, fade into strength with put spreads on the newly listed name after the first 3-5 trading sessions.
• Hedge policy: reduce gross exposure to late-stage venture/growth baskets for the next month; a failed or weak bookbuild would likely trigger 5-15% mark-downs across private AI and frontier-tech marks.
• Event-driven watchlist: if broader IPO activity picks up after this deal, rotate into listed infrastructure beneficiaries rather than new listings, using 30-60 day call spreads to capture sentiment without taking direct lockup risk.